This year, on the 31st Jan 2020 at 11 pm, the United Kingdom officially left the European Union, four years after the initial national referendum. As a result, the UK entered into a transition period, which allowed businesses some extra time to make the necessary preparations for a post Brexit marketplace. The deadline for this transition period is 31st December 2020, meaning that as of 1st January 2021, the UK will operate a full, external border with the EU.
Whilst this has been a long time coming, the reality of a post Brexit single market poses threats to businesses who currently trade with the EU, and means it is now imperative to consider some amendments to your normal business operations, to guarantee a continuation of current successful operations.
Top 5 things to consider when preparing to transition into a post Brexit single market
- Ensuring you have a GB EORI number: You will need a GB EORI (Economic Operator Registration and Identification) number to complete customs declarations. If you do not have one yet, don’t worry, you can register for free at gov.uk/eori.
- Preparing your custom declarations: Businesses will now need to decide how they are going to make customs declarations, whether it be via customs agents, freight forwarders, express operators. All of these work to support businesses with declarations and ensure that you are providing the necessary information, which is vital in the new marketplace. If you require more information on any of these service providers and how they can support you in a post Brexit market, visit gov.uk/guidance/appoint-someone-to-deal-with-customs-on-your-behalf
- Thinking about VAT:
- It is important to now check if you will be paying import VAT at the border. From Jan 2021 if the good in your consignment does not exceed £135, import VAT will not apply. This means taking the extra considerations when moving goods from the EU into the UK across the new external border, will be particularly important and proper preparations must be made if you think that you will be due to pay VAT. To find out more information on the new VAT regulations visit gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-customersfrom-1-january-2021
- Another important point to consider in relation to VAT and the new border is the potential postponement of your VAT. From January 2021, most businesses will be able to use postponed VAT accounting to account for import VAT on their VAT Return for goods imported from anywhere in the world. To find out if your business is eligible for this, check gov.uk/guidance/check-when-you-can-account-for-import-vat-on-your-vat-return.
- Checking the controlled goods list: From January 2021 trading goods will fall under two categories; controlled and non-controlled, each with their own set of regulations. You will need to check which category your trading goods are classed as, to see if you will need to complete any declarations. If your trading goods are not on the controlled goods list then you have the option of delaying import declarations until July 2021. For more information on this visit gov.uk/guidance/list-of-goods-imported-into-great-britain-from-the-eu-that-are-controlled
- Checking tariff tables: From Jan 2021, there will be new rates of customs Duty for imports- UK Global tariffs. It will therefore be beneficial for your company to check whether your trading goods are eligible for the new potential tariffs, so your company can make the proper preparations. To find out whether your company’s goods are subject to these new potential tariffs, go to gov.uk/guidance/uk-tariffs-from-1-january-2021.
To allow the trading industry some extra time to make the necessary arrangements and preparations for this new business model, the UK Government has made the decision to introduce new border regulations in 3 stages.
The Three Stages to the end of the Transition Period
Stage 1: from Jan 2021
When importing non-controlled goods
You will have up to 6 months (from the date your goods arrive) to:
- Submit any necessary customs declarations
- Pay any due Customs Duty and import VAT (when you submit your customs declaration)
Between 1 January and 30 June, it is vital that you keep a detailed record of your imported goods to support your declaration and use postponed VAT accounting if you’re VAT registered.
When you’re importing controlled goods (such as alcohol or tobacco products)
If you’re importing through locations that have existing Customs control systems, you will need to submit customs declarations when the goods arrive in Great Britain, unless you’re placing them in temporary storage. In this instance, goods in temporary storage can be stored for up to 90 before your declaration is due.
If you’re importing through a location without a Customs control system you will need to:
- Submit a customs declarations before the goods leave the EU
- Tell HMRC that your goods have arrived (using appropriate HMRC customs systems)
- If you’re entering goods to excise duty suspension, you will need to declare them on the Excise Movement and Control System by the end of the next working day
- Pay Customs Duty and import VAT straight away, unless the goods are entered into a Customs special procedure
If you’re importing live animals, high-risk animal by-products or high-risk plants or plant products, you will need to:
- Pre-notify via the UK’s new Import of Products, Animals, Food and Feed system (IPAFFS). For more information on this, visit https://www.gov.uk/guidance/import-of-products-animals-food-and-feed-system
- Provide health documentation for any live animals
- Provide phytosanitary certificates for high-risk plants or plant products
If your company has a good compliance record, you should be able to defer import declarations for the majority of goods, for up to 6 months after Jan 2021.
Stage 2: from April 2021
When you’re importing any products of animal origin or plants, you will need to:
- Pre-notify using the IPAFFS (https://www.gov.uk/guidance/import-of-products-animals-food-and-feed-system)
- Provide health documentation
- Provide phytosanitary certificates for all regulated plants and plant products
Stage 3: from 1 July 2021
When you import any goods into Great Britain, you will need to make full Safety and Security declarations before your goods arrive in Great Britain and then either:
- Submit customs declarations within 90 days of your goods arriving in Great Britain at locations using the temporary storage model
- Submit customs declarations before your goods depart the EU if moving through locations using the pre-lodgement model
- Pay relevant Customs Duty and import VAT (when you submit your customs declarations)
From July 2021 there will also be an increase in physical checks for SPS commodities, animals, plants and their products, and you will be able, but not obligated, to use postponed VAT accounting.
If you often move goods between Great Britain and Northern Ireland
Whilst Northern Ireland will still be part of the United Kingdom post-Brexit, it might be worth considering to sign up for the Trader Support Service (TSS), which will be handling all the new processes arising under the Northern Ireland Protocol from 1st January 2021. This can ease the worries of business owners when they are trading between Northern Ireland and Great Britain, as they know they will always have support and guidance on hand, should they ever need it. And as an added benefit – it’s for free!
Here at Animo we understand that the above mentioned may come across overwhelming and confusing for many businesses. So if you do have any worries or queries about anything mentioned above, or are in need of any other business support, get in touch with us today, via our contact form below, by calling us on +44 (0) 1268 760245 or by sending an email to firstname.lastname@example.org, where a member of our team will be happy to assist you.